Minimum Rates of Pay

All employees working in Australia are entitled to a minimum wage. In most cases, the minimum wages are determined within a Modern Award that covers their industry or occupation. Minimum rates of pay are usually increased at the start of each new financial year but due to the pandemic, some Modern Awards failed to deliver increases at the start of July 2020 and increases took effect at alternate timeframes during the last financial year.

The Fair Work Commission (“FWC”) is still yet to confirm what the minimum wage increases will be after 1 July 2021. However, closer to the new financial year, the FWC will release updated pay guides reflective of any changes. The Fair Work Information Statement will also be updated to reflect the national minimum wage (for those employees not governed under a Modern Award).

It is important to note however that if your business is paying over the minimum rates under the Award and your employees have an Individual Flexibility Agreement (IFA), you may not need to increase your rates of pay after the Annual Wage Review, provided you are continuing to pay above the Award rate, including relevant penalties and allowances.

Note: It is a requirement under the General Retail Award that if you vary the terms of the Award e.g., pay a higher hourly rate instead of paying allowances and penalty rates you must have an IFA in place.  If your business falls into this category, please contact us to discuss your legislative requirements and we can develop the most appropriate IFA for your business.

Update – Junior Rates within the General Retail Industry Award

In some modern awards, the minimum rates of pay will differ, and this can be dependent on a number of factors which include:

1.     Is the employee completing a traineeship or an apprenticeship?

2.     Is the employee a junior (usually this means, is the employee under the age of 21)?

3.     Does the employee have a disability?

In November 2020, there was a determination during the 4 yearly review of the General Retail Industry Award which sought to correct an anomaly regarding junior rates of pay. The FWC issued a decision that Level 1, 2 and 3 employees under the General Retail Industry Award are still eligible to receive junior rates of pay. However, the FWC determined that employees at the Level 4 classification may be disadvantaged being paid at a junior rate and therefore any trade qualified junior employees, and other junior employees working at Level 4 or higher, need to be paid the adult rate.

For advice on minimum rates of pay and IFAs, please contact our team of People Matters Advice advisors at AB Phillips on Monday to Friday between 9:00 am and 5:00 pm AEST by phone on 1300 208 828 or by email: advice@abphillips.com.au. 

Information provided should not be relied on as a substitute for detailed professional advice from AB Phillips or professional legal or financial advice on any matter. Where you would like additional information and support relating to the content in this document please contact AB Phillips.